Tesla Inc TSLA shares are up 44% since the company’s 5-1 stock split on Aug. 31, and one large option trader may be betting that upcoming delivery numbers will push the price higher.
The Tesla Trade: At 11:58 a.m. Thursday, a trader executed a call sweep of 703 Tesla options with a $650 strike price expiring on Apr. 9. The trade represented a $1.9-million bullish bet for which the trader paid $27 per option contract.
Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating a large move in stock price will occur imminently. A sweeper pays market price for the call options, instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.
These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.
What’s Coming Up For Tesla: Tesla is expected to release its first-quarter 2021 delivery numbers within the coming days.
When Tesla reported its fourth-quarter results in January, the company said it expected to deliver 750,000 vehicles this year. Tesla’s first-quarter delivery numbers will give investors an idea of whether Tesla is on track to meet its goal.
Tesla’s share price has also dropped almost 30% in recent weeks amid a tech sector rout. With Tesla trading on the Nasdaq now, a big delivery numbers beat could help the general markets make a turnaround.
TSLA Price Action: Tesla shares were up 1.35% at $638.78 at last check Thursday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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